In Blog 14, we discussed that, unlike German insolvency law for example, what goes on within larger organizations often lacks hard figures and criteria that would result in transparent, stringent and thorough actions as a consequence.
Are the inner workings of companies unregulated? No, of course not. There are mostly reports, sometimes too many, whether these are from a quantitative or qualitative perspective. Especially in the case of major change programs, particularly transformation programs with hard result targets, there are two important complexity levels that don’t show up in reports:
Complexity level I…
…comprises the previously lacking categorization of the transformation program by difficulty level and the preparation time necessary as a result. Primarily, projects and programs for most people in the organization suddenly drop from “above” and are expected to begin right away each time – a classic cold start with all the associated risks. It’s kick-off time. Faster than you can think, you’re there with the others, already gazing at the first slide. What’s missing is actual preparation. The first consideration is professional categorization using 5 complexity levels. See the image for a rough categorization scale. One of the most common basic errors is to not allocate sufficient time for visible and invisible success factors. Excellent, professional preparation is the foundation for implementation. And there is one simple rule: the more complex your program is, the more quality you need in your preparations and in filtering your project’s keys to success.
Graphic: Complexity levels in transformation programs
Complexity level I (Level 1-5)
Complexity level II (Level 6-8)
Complexity level II…
…if your program has “made it” to level 6, 7 or 8, then it will be increasingly difficult or even impossible to achieve your own transformation goals. At level 6, you often hear things like: ‘it really is five minutes to midnight here!’. In larger organizations and businesses, it’s possible for it to even be five minutes past two. Through tactical, political considerations and sufficient cash flow, there can be a tough reassessment of necessary “resets” or “program overhauls” so that a U-turn can be achieved. Level 8 is the “black hole”. It’s just too late. How the program can really be ended very significantly depends on the relevant organizational structure.
The path from complexity level I to level II is essential to your transformation program. In the best possible case, you stay at level I, you work towards success transparently, rigorously and consistently, while controversial dialog makes the whole team even stronger. If this does not happen, or there is too little structure in its implementation, the result can be two significant developments that pose considerable risk to the program. For example, the program could jump from level 3 to level 6 or from level 4 to level 6. The developments are very jarring.
The jump to level 2 may have two possible reasons, both of which are somewhat based on the human defense mechanism¹ in situations of conflict:
a) There are objectifiable information, reports and impressions regarding the company’s success but the facts are disowned. This may take place through an interpretation of the facts in the sense of the “ideal situation” or even by distracting attention from the source of risk.
b) There is no transparency. This may be due to a (undesired) lack of quantitative and qualitative reporting or a conscious method of “non-transparency” as this has already helped key people in the past to ensure the basis of their power.
At the end of the day, one thing must be established. Successful change in organizations always takes place visibly. Transformations required in a crisis always run the very real latent risk of expanding into complexity level 2. The margins between levels 6, 7 and 8 are very narrow and associated with great speed. At the end of the day, this exclusively depends on the transformation program’s cash flow. The most difficult setups are those within corporations where transformation programs take place in the smaller businesses while the parent companies signal the principle of “hope” and/or consider the conflict situation from a perspective of political power play and cash flow above all.
¹“[…] Defense mechanisms in the psychoanalysis sense are subconscious operations in which information is processed separately from the consciousness in order to retain psychic balance. These subconscious, automatic mechanisms, e.g. identifying, intellectualizing, converting, projecting, regressing, sublimating, suppressing, denying, are targeted and serve purposes of homeostasis, i.e. to avoid the unpleasantness caused by signal effects such as fear, shame or guilt. If these behaviors are initially established intentionally, this defense will take place automatically.” (Source: https://www.spektrum.de/lexikon/psychologie/abwehrmechanismen/112)